#1
What is the law of demand in microeconomics?
As price increases, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded.
#2
What is the law of diminishing marginal utility?
As consumption increases, marginal utility decreases
ExplanationDeclining additional satisfaction from consumption.
#3
What is the difference between a normal good and an inferior good?
A normal good has a positive income elasticity of demand, while an inferior good has a negative income elasticity of demand
ExplanationIncome's effect on demand for different goods.
#4
What is the difference between a perfectly elastic demand curve and a perfectly inelastic demand curve?
A perfectly elastic demand curve is horizontal, while a perfectly inelastic demand curve is vertical
ExplanationResponse of quantity demanded to price changes.
#5
What is the concept of a Giffen good in economics?
A good for which demand decreases as income increases
ExplanationUnique demand behavior with income changes.
#6
What is elasticity of demand?
A measure of how much quantity demanded responds to a change in price
ExplanationSensitivity of demand to price changes.
#7
In a perfectly competitive market, what is true about the price and marginal revenue?
Price is equal to marginal revenue
ExplanationEquality between price and marginal revenue.
#8
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationRatio of quantity change to price change.
#9
What is a normal good in economics?
A good for which demand increases as income increases
ExplanationGoods with positive income elasticity.
#10
What is the law of supply in microeconomics?
As price increases, quantity supplied increases
ExplanationDirect relationship between price and quantity supplied.
#11
What is the concept of consumer surplus?
The difference between the price a consumer is willing to pay and the price actually paid
ExplanationBenefit gained by consumers from lower prices.
#12
What is the concept of marginal cost?
The total cost of producing one more unit of a good
ExplanationCost of producing an additional unit.
#13
What is the Laffer curve in economics?
A curve depicting the relationship between tax rates and government revenue
ExplanationTax rate's impact on government revenue.
#14
What is the Nash equilibrium in game theory?
A situation where each player chooses the best strategy given the strategy of the other players
ExplanationStable strategy choices in strategic interactions.
#15
What is the concept of price discrimination in microeconomics?
Charging different prices for the same good in different markets
ExplanationVarying prices based on market segments.
#16
What is a price floor?
A legally established minimum price for a good or service
ExplanationGovernment-imposed lower limit on prices.
#17
What is the Coase theorem in microeconomics?
A theory about the importance of property rights in resolving externalities
ExplanationProperty rights' role in addressing externalities.
#18
What is the difference between economic profit and accounting profit?
Accounting profit includes explicit costs, while economic profit includes both explicit and implicit costs
ExplanationInclusion of implicit costs in economic profit.
#19
What is the tragedy of the commons?
A situation where a common resource is overused and depleted due to lack of private ownership
ExplanationOveruse of shared resources without regulation.
#20
What is a monopoly in microeconomics?
A market structure with one seller and many buyers
ExplanationSingle seller dominating the market.
#21
What is the concept of opportunity cost?
The value of the best alternative forgone when a decision is made
ExplanationCost of the next best alternative.
#22
In the context of externalities, what is a positive externality?
A situation where the production of a good benefits third parties
ExplanationIndirect benefits from production.
#23
What is the concept of oligopoly?
A market structure with a small number of large sellers dominating the market
ExplanationFew large sellers controlling the market.
#24
What is the concept of a public good in economics?
A good without rivalry and without excludability
ExplanationNon-excludable, non-rivalrous goods.
#25
In the context of market structures, what is monopolistic competition?
A market structure with few sellers and differentiated products
ExplanationSeveral firms with differentiated products.